Investors’ decision-making are influenced by certain biases as reported in literature. Fundamental analysis is based on the assumption that investors think rationally, but in practice, things may be different. This study captures the impact of herding behavior and overconfidence biases on the investors’ decision-making in Pakistan. The proposed study collects the necessary data through questionnaires distributed among 150 respondents who were active in stock market and manage to process 100 completed ones. The relationships between investors’ decision-making and herding behavior as well as overconfidence biases were empirically tested using Ordinary Least Square (OLS) method. The results show that Pakistani investors’ decisions were significantly influenced by both herding behavior and overconfidence biases.

This paper investigates the effect of adjusted DuPont ratio and its components on investors’ decisions in short and long term. The primary objective of this study is to find the effect of adjusted DuPont ratio and its components on herding behavior of investors in one and several year period. Hence, 85 corporations as the member of Tehran stock exchange over the period 2006-2011 are selected. In order to recognize the herding, by market index consideration, the herded B and in order to hypothesis validity SPSS software and multivariable linear regression have been used. As the results of this study indicate, the adjusted DuPont ratio and its components have more effect on investors’ decisions in short term but in long the period, the effect of this ratio on herding investors’ behavior are reduced. Furthermore, from the two components of adjusted DuPont ratio, profit margin has more effect on investor & apos; s decisions.

During the past century, there were different events where herding behavior created market turbulence and many investors were hurt, significantly. In this paper, we perform a survey to investigate investors’ behavior on creating herding behavior when they face with various levels of uncertainty on available information on the market. The survey designs a questionnaire, distributes it among some investors, and analyzes the results. The findings of our survey indicate that when there is a high level of uncertainty on publicly disclosed information, most investors assign more weights on confidential information or make no decision. In the event the uncertainty is on moderate level, investors rely more on publicly announced news and follow others’ behaviors. Finally, when the level of uncertainty is low, most investors depend on public information but this uncertainty creates less herding behavior compared with the previous case. The study also indicates that those investors who are normally making their decision with high inertia are not influenced by herding behavior.